Business News Roundup, April 3

Chronicle News Services

Updated
4:03 pm PDT, Monday, April 2, 2018

Fitbit stock takes a tumble

Fitbit Inc.’s troubles aren’t letting up.

Shares of the wearable health-device company based in San Francisco fell 9.5 percent to close at $4.62 Monday after Morgan Stanley recommended investors sell the stock, saying Fitbit’s plans to focus more on software instead of devices are uncertain and will take time to bear fruit.

Fitbit, which helped pioneer the fitness-tracking industry, has been squeezed between Apple Inc.’s high-end watch and cheaper options by companies like Xiaomi Corp. In February, Fitbit reported sales that missed analysts’ estimates in the crucial holiday quarter. Now it’s working to produce a new watch meant to have broader consumer appeal, while at the same time building digital-health software aimed at corporate customers.

Sports

Disney ESPN+ to launch

Disney announced Monday it will launch ESPN+, its new sports streaming service, on April 12, according to StreetInsider.

Subscribers of the company’s first direct-to-consumer service will be able to access it through the ESPN app or ESPN.com. The service costs $.4.99 a month and will stream live events from a wide range of sports.

Advertising

Alphabet alters Google metric

Alphabet Inc. is changing a closely watched measure of Google’s digital advertising business and adjusting how it accounts for some private stock holdings, a move that will make reported income more volatile.

The main difference is in how Google discloses the performance of its Network business, which runs ads on thousands of third-party websites. This will no longer be reported on a “cost-per-click” basis, or how many times the ads are clicked on. Instead, Google will report changes based on cost per impression — the number of times the ads are viewed. In the fourth quarter of 2017, Google reported $5 billion in sales from network sites.

By using impressions, Google is providing a more accurate reflection of its second-biggest business, after search, said Brian Wieser, an analyst at Pivotal Research Group. Most marketers already buy banner and video ads on websites based on impressions rather than cost-per-click.

Alphabet described the changes, which kick in for the first quarter, on Monday. The company is scheduled to report results April 23.

Digital assault

Cyberattack

shuts pipeline

A cyberattack that hobbled the electronic communication system used by a major U.S. pipeline network was overcome Monday.

Energy Transfer Partners LP was confident that files could safely be exchanged through the EDI platform provided by third-party Energy Services Group LLC, the pipeline company said. Earlier in the day, it reported a shutdown of the system because of an attack, while saying there was no effect on the flow of natural gas.

The EDI system conducts business through a computer-to-computer exchange of documents with customers. Though it’s not clear who was responsible for the attack, it comes after U.S. officials warned in March that Russian hackers are conducting a broad assault on the nation’s electric grid and other targets.

The Transwestern pipeline system connects gas supplies in the Rockies and the Permian Basin of West Texas and New Mexico to customers in California, Arizona and Nevada. The Rover pipeline, also controlled by Energy Transfer, is designed to transport gas from West Virginia and Ohio to markets in the Midwest and Canada.